Now that both the Democratic and Republican presidential tickets are set, we are taking a closer look at some of the big issues of the campaign and comparing the plans put forward by Mitt Romney and Paul Ryan with those advanced by President Obama. Our Grace Rauh has more on the competing ideas on how to lower the national debt.
UNITED STATES -- “All these deficits and all of this debt is one of the greatest threats to our economy and job creation.”
Congressman Paul Ryan is casting himself as a deficit hawk. But some say the title may not be quite accurate. The Washington-based Tax Policy Center says Ryan's priorities are lowering taxes and shrinking government. His own plan would only balance the federal budget in 2063.
The President, however, has not attempted to tackle balancing the budget with quite the same gusto.
“President Obama has not made specific recommendations for how to solve the very long-term budget problem,” said Henry Aaron of the Brookings Institution.
Ryan calls for cutting federal spending by about $5 trillion over the next decade. But he also would reduce revenues by changing income tax rates.
Married couples who earn less than $100,000 and file jointly would pay a ten percent tax rate. Those earning more would be taxed at a rate of 25 percent. The top income tax rate is currently 35 percent.
Ryan says he would eliminate the alternative minimum tax and eliminate taxes on interest, capital gains and dividends.
While Ryan's plan lowers taxes for high-earners, a Congressional Committee report found that it would increase the tax bill for middle-income families.
Aaron said, “He proposes tax cuts that would bring very sizeable benefits to high income individuals and would force even deeper cuts than would otherwise be necessary.”
The President, meanwhile, is looking to raise taxes on the wealthy. The income tax rate for couples earning more than $250,000 would jump to 36 percent. For couples earning more than $390,000, it would be 39.6 percent. He would keep the Bush-era tax cuts in place for everyone else.
Obama and Ryan both call for lowering corporate taxes. Ryan would cut the highest rate from 35 percent to 25 percent. Obama would drop it to 28 percent. The President would also eliminate dozens of business tax breaks.
Of course, when it comes to taxes, it is possible that neither of these plans will ever take effect. If Washington lawmakers do not reach a deal by the end of the year on the tax cuts enacted by President Bush, they will expire and taxes will go up nearly all Americans.